Due Diligence Process for Thai Property
If you decide to invest in real property in Thailand, you will want to have all the information about the property you are interested in buying that you can. Researching your potential investment is sometimes called doing your due diligence. The due diligence process begins before you sign a contract or make any payment and should be completed by the time ownership is transferred at the very latest.
Due diligence often begins with a visual inspection of the property. A visual inspection can determine if development has started if the land is connected to a public road if the boundaries of the land are clear and the physical status of any buildings. In addition, you can observe the quality of the construction, the view and other features that may make the investment more or less desirable.
Once you determine that you are interested in the property, it is a good idea to make sure that the title to the land is available and in good condition. A title search will trace the ownership of the land up to the present. It is also a good idea to determine the ownership of the parcels of land immediately around the one you are interested in and the relevant local zoning ordinances to get more information about the neighborhood.
If you are buying a building that is not yet built, you should be sure that the developer has all of the required permits for the project in addition to ownership of the land. New developments require a number of approvals and official government filings that should be checked to ensure that everything goes smoothly with your purchase. For example, some areas of Thailand do not permit condominium development, so if you are interested in buying a condominium you should check the restrictions on land use to make sure that a condominium can be developed where the development is advertised. In addition, drainage must be available for all new developments.
You should also review the developer’s Initial Environmental Examination (IEE) report on file with the provincial Office of Natural Resources and Environment to make sure that it has been properly filed and approval has been granted. It is important to compare the IEE report with the developer’s construction plans, as sometimes the construction plans are changed after the developer received approval of an outdated IEE report. You should also review the construction permit to make sure that it was legally issued and accurately reflects the developer’s current plans. Thai law requires a minimum number of parking spaces with new condominium construction, so check official records to determine how many parking spaces are planned and if that meets the legal requirements.
In addition, it is a good idea to review local court records to determine if the seller is involved in any court cases. If other buyers have sued the seller this could raise a red flag and you may not want to deal with that seller.
In some cases, our due diligence can raise minor concerns with the paperwork that can be corrected before purchase. In other cases, due diligence can save you from making a bad investment.
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Siam Legal is an international law firm with experienced lawyers, attorneys, and solicitors both in Thailand law and international law. This Thailand law firm offers comprehensive legal services in Thailand to both local and foreign clients for Litigation such as civil & criminal cases, labor disputes, commercial cases, divorce, adoption, extradition, fraud, and drug cases. Other legal expertise of the law firm varied in cases involving corporate law such as company registration & Thailand BOI, family law, property law, and private investigation.